Episode 6: Tax & Super: The year that was, and the year ahead

Episode Summary:In this episode, Darren Hagarty, a technical specialist with ABN, delivers an insightful session on key changes in the tax, superannuation, and GST landscapes for 2024, with a forward look into 2025. Darren explores pressing topics from the Australian Taxation Office's (ATO) current areas of focus and legislative updates to court cases shaping the field. This episode is a must-listen for BAS agents, bookkeepers, and anyone looking to stay updated on the latest developments impacting tax and superannuation compliance.IntroductionDarren opens with an overview of the episode’s focus, highlighting the importance of tax and super compliance awareness for bookkeepers. He emphasizes practical insights over standard tax rate changes, aiming to equip listeners with knowledge of ATO's latest priorities and potential pitfalls.Income Tax and Rental PropertiesDarren dives into income tax, focusing on rental properties. He shares the ATO’s heightened scrutiny on rental property deductions, especially around interest deductions, repairs vs. improvements, and private use adjustments. He emphasises the necessity of accurate records to avoid common compliance issues.Superannuation and ContractorsThis segment addresses the superannuation guarantee (SG) obligations for contractors, a common compliance challenge. Darren discusses recent legal cases with contrasting outcomes, highlighting the risks and the complex SG rules that apply even to contractors with ABNs.Personal Services IncomePersonal Services Income (PSI) is a hot topic, with new ATO compliance guidelines making it essential for business owners to assess the risk of their income arrangements. Darren explains the PSI rules and potential compliance pitfalls for those using companies or trusts to manage personal service income.TrustsDarren discusses the complexities of managing trusts, from trust distributions and elections to new ATO compliance rules. He breaks down real-world examples of distribution errors and compliance issues. Key cases, including Bendal v. Commissioner of Taxation and Owies, further illustrate the importance of precise trust management and highlight legal considerations affecting trustees.Super Guarantee Data Matching and LettersThe ATO’s data-matching technology is flagging SG non-compliance based on payroll and superannuation fund data. Darren shares tips for employers who receive SG query letters, encouraging them to verify ATO data, especially when payment timing is unclear.Payday Super and Future Superannuation ChangesLooking ahead to July 2026, Darren touches on the Payday Super changes, requiring employers to remit super contributions concurrently with payroll. Additionally, he covers the new Division 296 legislation imposing an extra tax on high-balance super accounts, expected to impact more Australians over time due to non-indexation.